An insurance claim is a request for an insurance provider to assume financial responsibility for a loss covered by an insurance policy. Many different types of losses may be insured, such as damage to a vehicle or home, medical conditions, death, identity theft, loss of wages due to disability or unemployment, or any other type of insurable loss.
Often, when an insurable loss occurs, a business entity is employed to provide a service associated with the loss. For example, a doctor may be employed to provide medical treatment, an auto mechanic may be employed to repair a damaged vehicle, a building contractor may be employed to repair a damaged home, or a funeral parlor may be employed to manage funeral services. Many different types of service providers exist, and in some cases a single service provider may provide multiple services. For example, a single visit to a hospital may involve multiple medical treatments. The amount of financial responsibility assumed by the insurance provider is generally related to the specific services provided. Thus, an insurance claim typically lists the service(s) provided and the amount(s) billed by the service provider.
In some cases, the insurance provider only assumes partial financial responsibility for a given service, and the insured party is responsible for the remaining amount. For example, medical insurance policies typically require the insured party to pay a co-pay and/or deductible corresponding to a fixed amount or percentage of the medical bill. Further, one or more services included in the insurance claim may not be covered by the insurance policy, in which case the insurance provider may reject the uncovered portion of the insurance claim and defer full financial responsibility for the uncovered portion to the insured party.
In some cases, after an insurance claim is filed, the insurance claim may need to be adjusted and/or reprocessed. For example, the insurance claim may need adjustment if it contains erroneous information, such as an incorrect bill amount, an incorrect date or location of service, an incorrect drug or treatment code, a typographical error, or any other type of erroneous information that requires an adjustment to an insurance claim. An adjusted insurance claim may then be reprocessed, to determine whether the insurance provider's and/or insured party's financial responsibilities have changed due to the adjustment.
An insurance claim may also be reprocessed if the insurance provider made an error during initial processing of the insurance claim. For example, the insurance provider may have failed to calculate the correct amount of financial responsibility, or may have incorrectly rejected the insurance claim. Such errors may be caused, for example, by a software bug or data entry error. Those skilled in the art will appreciate that many different conditions exist in which an insurance claim may need to be adjusted and/or reprocessed.
In cases where an insurance claim is reprocessed, the burden generally falls on the insured party to determine the remaining financial responsibility for the insurance claim. Typically, this is accomplished by the insured party maintaining a physical set of insurance-related documentation, such as mailed insurance statements, service providers' bills, or any other type of insurance-related documentation. When the insurance provider mails updated information about the insurance claim to the insured party, the insured party must physically compare the most recent mailing with earlier documentation to determine whether their financial responsibility has changed.